Business Wars Food Delivery Wars | Deliver or Die | 3
Jun 14, 2021
In December 2014, Grubhub's CEO takes bold steps to reclaim market share by employing its own drivers. Meanwhile, DoorDash faces fundraising challenges and scrutiny over its practices. Postmates capitalizes on the luxury segment, while Uber Eats expands its reach, notably through a partnership with McDonald's. Tensions rise as angry drivers threaten the whole food delivery model. Legal battles, competitive strategies, and evolving market dynamics paint a lively picture of this fast-paced industry.
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Grubhub's Weakness
- In December 2014, Grubhub's CEO, Matt Maloney, felt pressure from competitors like Amazon, Uber, Postmates, and DoorDash.
- Grubhub, despite being the market leader, lacked its own delivery network, a weakness competitors exploited.
DoorDash's Commission Impact
- DoorDash's high commission fees (20-25%) negatively impacted small restaurants' profits, causing concern among owners.
- This, coupled with a lack of tips for in-house staff and reduced drink sales, created financial strain despite increased order volume.
Uber Driver Ruling
- A California labor commissioner ruled that an Uber driver should be classified as an employee, not a contractor, setting a legal precedent.
- This ruling threatened the business models of gig economy companies like Uber, Grubhub, Postmates, and DoorDash, particularly DoorDash, which was in the midst of a funding round.